Bottle Water Industry Usa
1. Statement of level of analysis
In this case study, we will stand for Nestle Waters and compose an analysis about bottled water industry in United States at strategic business unit level (SBU)
2. Analysis a) Market:
During 1996 to 2001, the United States had became the world’s largest market for bottled water, the annual consumption had increased with 9.2% compound average growth rate, from 3,495.1 (1996) to 5,425.3 (2001) million of gallons. Mainly bottled water can be divided into 2 types, bulk water and PET contained water, during 1990 s to early 2000s, consumption of PET contained water had increased dramatically with an average annually growth rate, 29.1% between 1998 and 2001. The market had became dominated by a few international food and beverage producers like Coca-Cola, PepsiCo, Nestle, and Groupe Danone, but also included some small regional sellers that were required to develop either low-cost production and distribution capabilities or differentiation strategies keyed to some unique product attributes.
b) Macro environment:
America’s gross domestic product growth rate had remained a healthy increase trend during the period of 1995-2000, since 9/11 happened in 2001; America had joined the war with Iraq and Afghanistan which had potentially influenced the GDP growth rate and since American are spending less money on daily use purpose. (Economic)
There’s an increased focus on fitness and health which had improved consumer awareness of the need for proper hydration, it had led many consumers to shift traditional beverage preferences toward bottled water. (Social demographic)
Due to the tap water pollution scandals during 1990s to early 2000s, more customers are shifting their preference from tap water to bottled water; all the bottled water producers in U.S. were required to meet the standards of both the EPA and the FDA which set a strict testing standard for all bottled water producer, also according to FDA’s standard of Identity,
In this case study, we will stand for Nestle Waters and compose an analysis about bottled water industry in United States at strategic business unit level (SBU)
2. Analysis a) Market:
During 1996 to 2001, the United States had became the world’s largest market for bottled water, the annual consumption had increased with 9.2% compound average growth rate, from 3,495.1 (1996) to 5,425.3 (2001) million of gallons. Mainly bottled water can be divided into 2 types, bulk water and PET contained water, during 1990 s to early 2000s, consumption of PET contained water had increased dramatically with an average annually growth rate, 29.1% between 1998 and 2001. The market had became dominated by a few international food and beverage producers like Coca-Cola, PepsiCo, Nestle, and Groupe Danone, but also included some small regional sellers that were required to develop either low-cost production and distribution capabilities or differentiation strategies keyed to some unique product attributes.
b) Macro environment:
America’s gross domestic product growth rate had remained a healthy increase trend during the period of 1995-2000, since 9/11 happened in 2001; America had joined the war with Iraq and Afghanistan which had potentially influenced the GDP growth rate and since American are spending less money on daily use purpose. (Economic)
There’s an increased focus on fitness and health which had improved consumer awareness of the need for proper hydration, it had led many consumers to shift traditional beverage preferences toward bottled water. (Social demographic)
Due to the tap water pollution scandals during 1990s to early 2000s, more customers are shifting their preference from tap water to bottled water; all the bottled water producers in U.S. were required to meet the standards of both the EPA and the FDA which set a strict testing standard for all bottled water producer, also according to FDA’s standard of Identity,